The third hurdle is perhaps the most challenging: getting multiple grid operators to agree on how to share the costs and benefits of a cross-border transmission project. This can involve intricate negotiations over how much each grid operator will pay, how the costs will be allocated among customers, and how the benefits of the new transmission line will be shared.
The new $1.7 billion plan proposed by MISO and SPP represents a groundbreaking effort to clear these hurdles and move forward with much-needed interregional transmission projects. By working together to identify projects that will bring value to customers on both sides of the border, the two grid operators are setting an example for how collaboration can unlock the potential for clean energy development across the country.
The joint transmission projects proposed as part of the JTIQ process could have a significant impact on the region’s energy landscape. By easing interconnection for up to 53 gigawatts of planned projects, these new transmission lines could enable a wave of new wind and solar farms to come online, helping to reduce congestion on the grid and bring more cheap, clean energy to consumers.
But the benefits of these projects extend beyond the Midwest. As the U.S. strives to meet its clean energy goals, the need for new transmission lines to connect renewable energy resources to population centers will only grow. By demonstrating the value of interregional collaboration, MISO and SPP are paving the way for similar efforts in other parts of the country.
The challenges of interregional transmission planning are complex, but the potential rewards are great. By overcoming the “triple hurdle” of cost allocation, negotiation, and agreement, grid operators can unlock the full potential of the clean energy transition and build a more resilient and sustainable grid for the future. The $1.7 billion plan proposed by MISO and SPP is a significant step in the right direction, and it holds promise for a cleaner, more reliable energy future for all. The third hurdle in the merging of MISO and SPP’s coordinated transmission planning and cost-sharing efforts represents a significant challenge in the quest for a unified approach. According to Theodore Paradise, an energy, infrastructure, and resources partner at law firm K&L Gates, the new JTIQ tariff structure developed by the two grid operators marks a breakthrough in identifying coordinated transmission efforts that could interconnect more generation in a cost-effective manner.
However, while the structure created by MISO and SPP is a step in the right direction, it is not without its flaws. Rob Gramlich, president of consultancy Grid Strategies, pointed out that the five transmission projects proposed in the initial round are undersized compared to what is both possible and necessary to facilitate the development of more affordable, clean energy sources. Additionally, the first round of projects does not address the issue of utilities within each grid operator sharing the costs of the proposed grid projects, which is a critical aspect of future interregional planning efforts.
Gramlich highlighted the importance of federal funding in advancing the plans for the initial round of projects, noting that without the contribution of hundreds of millions of dollars from the federal government, the projects may not have been able to move forward. The Department of Energy’s issuance of $3.5 billion in grid grants in October 2023 played a crucial role in reducing the financial burden on project developers.
Studies from the U.S. Department of Energy, the Massachusetts Institute of Technology, and Princeton University have emphasized the benefits of building more transmission lines connecting distant regions of the country. These benefits include reducing congestion costs, enabling the integration of cheaper wind and solar power, and enhancing grid resilience by sharing power between regions with varying weather conditions.
Long-range transmission is also essential for expanding clean power capacity and addressing the climate crisis. However, delays in project approvals and the high costs associated with grid upgrades pose significant challenges to the integration of clean energy sources into the grid. FERC’s regional transmission order issued this year aims to promote long-range grid planning to address these challenges and maximize the potential benefits of interregional transmission projects. Regional transmission buildouts are finally gaining momentum after a decade of stagnation. One notable example is MISO’s multibillion-dollar long-range transmission plan, which is now in the works. However, while progress is being made at the regional level, the Federal Energy Regulatory Commission (FERC) is lagging behind on interregional transmission policy.
JITQ, a joint transmission planning initiative between MISO and SPP, is pushing forward with practical solutions even before the necessary regulatory approvals are in place. This proactive approach is paving the way for more collaborative efforts in the future.
In addition to MISO’s efforts, other grid operators like PJM are also exploring interregional planning. PJM and MISO recently launched a process to engage in joint transmission analysis and coordinated modeling to enhance reliability and meet their joint needs.
Despite the progress being made, there is still much work to be done before the plans can be implemented. FERC must review and approve the proposed changes to the tariffs of MISO and SPP, which outline the rules governing transmission grids and energy markets. If approved by the November 2024 deadline, the next steps will involve siting, permitting, and construction of the new transmission lines.
The JTIQ initiative, while still in its early stages, has the potential to set a precedent for future interregional collaboration. By establishing common models, methods, configurations, and cost allocation plans, this initiative could serve as a blueprint for other regional planning organizations to follow suit.
Overall, the push for regional transmission buildouts is a positive step towards improving grid reliability and efficiency. As more grid operators come together to tackle common challenges, the future of the energy industry looks promising.
